The New Health Care Law: How it Impacts Your Life

Even though the Affordable Care Act was enacted in 2010, there are still a lot of questions about how the law will impact our lives. In 2013, many of the changes will be “behind the scenes,” setting up funding for expanded coverage and creating health care exchanges. The year 2014 will bring about easier ways to purchase health insurance and an end to exclusions on pre-existing conditions.

The following is an outline of what has already changed and what to expect.

Health Care Reforms Already in Effect

Dependents can remain on their parents health care plan until they turn 26 years old – whether or not they are listed as dependents or live at home.

Temporary and limited relief for those with pre-existing conditions became available. For adults with pre-existing conditions who been uninsured for at least 6 months, temporary plans, at about the same cost as what a healthy person would pay, was offered in all 50 states plus the District of Columbia funded by federal subsidies. This temporary insurance will expire in 2014 when pre-existing conditions must be covered.

Preventive care must be covered and be available without co-payments, coinsurance and deductibles through private insurance plans. Preventive care includes immunizations, Pap smears, colonoscopies and other cancer screening tools. Women’s health care also includes screening for gestational diabetes, breastfeeding supplies and contraceptives. If your plan does not yet cover these, it will at your next anniversary date.

Discounts on prescription drugs for people on Medicare who reach the “donut hole” in prescription coverage.

Health insurance exchanges will be set up. Health insurance exchanged are expected to go live on October 1, 2013 and will be a regulated marketplace where people can purchase health insurance. For states opting out of the health insurance exchanges, they will be set up by the federal government.

For those making more than $200,000 (or $250,000 for couples), the payroll tax for Medicare will go up. Investment income will also be taxed.

When applying for health insurance or renewing an existing policy, you will receive a summary of benefits and coverage which will explain what the policy covers in more understandable language.

Flexible spending accounts, used to pay for health care costs not covered by health insurance, will be limited to $2,500.

Deductions for health insurance costs on income taxes will be raised from 7.5 percent of adjusted gross income to 10 percent.

Changes Taking Place in 2014

Insurance companies will no longer be able to deny coverage based on pre-existing conditions. They will not be able to charge more based on gender or health.

Individuals and small-business owners will be able to compare and purchase health insurance through insurance exchanges.

There will be an insurance mandate, meaning that everyone will need to have health insurance or pay a penalty. Insurance bought privately, through your employer or through social or government agencies will all qualify as health insurance. Penalties will begin at $95.00 per individual.

Insurance subsidies will be available to those who can’t afford health insurance as advance tax credits.